The Jersey Shore by Karl Hess: December 2017

The Reason Home Prices are Increasing in Manahawkin

Manahawkin Home Price Increases

 

There are many unsubstantiated theories as to why home values are continuing to increase in Manahawkin. From those who are worried that lending standards are again becoming too lenient (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.

However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase.

It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability.

In Manahawkin, the absorption rate for November is less than 4 months. Well below the “neutral market” supply. The year-to-date absorption rate is 3.9 months in Manahawkin, which is a reduction of over 42% from 2016. The median sold price of homes in Manahawkin has increased by 5.5%

What’s Your Manahawkin Home Worth? Get a FREE instant valuation!

In most housing markets, anything less than six months will cause home values to appreciate and anything more than seven months will cause prices to depreciate (see chart 1).

Absorption Rate Explanation

According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes has been below six months for the last four years (see chart 2).

National Absorption Rate

Bottom Line

If buyer demand outpaces the current supply of existing homes for sale in Manahawkin, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.

As always, thank you for your time and feel free to get in touch if you have any questions about buying, selling or investing in real estate in Manahawkin. Karl Hess, Keller Williams Shore Properties - #1 Real Estate Office in Ocean County

 

 

 609-553-7926

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www.TheJerseyShoreHomeFinder.com

 

 Licensed in New Jersey.  Keller Williams Shore Properties 

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Comment balloon 0 commentsKarl Hess • December 28 2017 07:16AM
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